Healthcare IT Budget Beware! How to Minimize HIPAA 5010 and ICD-10 Costs

Spend Matters welcomes another guest post from NPI, a spend management consultancy focused on delivering savings in the areas of IT, telecom, transportation and energy.

We may have just stepped into 2011, but January 1, 2012 is approaching all too quickly for the healthcare industry. That's the date when physicians, hospitals, payers, clearinghouses, pharmacies and dentists will be required to be compliant with HIPAA Version 5010 (which accommodates ICD-10 codes).

In laymen's terms, if providers want to get paid, they will need to support electronic healthcare transactions that incorporate new codes and classifications. As a result, many healthcare organizations will be upgrading or purchasing new software, including electronic healthcare record (EHR) solutions. It may be a blow to the IT budget, but there are several ways organizations can minimize the costs.

  • Assemble the right purchasing team ahead of time. These complex purchases will require a mix of expertise from different areas of your business. Create a cross-functional purchasing team that includes physician practices and managers, IT and sourcing. Your purchasing process should be comprehensive and address all aspects of the purchase, including pricing, terms, implementation and training. This is where a truly cross-functional team will shine.
  • Bring in more vendors. More often than not, companies only bring in 1-2 preferred vendors during the IT buying process. Beware: with more deals than they can chase, vendors will absolutely charge top dollar if there is no real competition. Invite more vendors to the table up front and it will pay off in the end.
  • Understand what constitutes "fair" pricing and terms. With a plethora of new and immature offerings (e.g. cloud-based EHR), vendor pricing and terms are all over the map. New charges like usage-based fees (e.g. SaaS, per claim, per visit, etc.) and code updates require careful negotiation. If you aren't familiar with these complexities, look to a third party to ensure pricing and terms are in-line with current market conditions.

-- Jeff Muscarella, EVP, IT, NPI

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